4 Medicare Changes to Know for 2026

Medicare open enrollment asks participants to revisit some important decisions every year. 2026 is shaping up to be an important one.

Costs are moving higher, some plans are going away, and certain benefits are being pared back.

Not all of the changes below apply to everyone. But we felt it important to highlight key takeaways to be aware of, and as always, we are happy to discuss them with you and how they may affect your situation.

1. Higher Premiums and Higher IRMAA Surcharges for High-Income Retirees

In our view, the most meaningful change for 2026 is the adjustment to
Part B premiums and IRMAA brackets.

• The standard Part B premium will be $202.90 per month in 2026 (up from $185.00 in 2025).

• The Part B deductible rises to $283 (from $257).

More importantly, IRMAA (the income-based surcharge applied to higher-income retirees) is increasing meaningfully:

• IRMAA begins at MAGI above $109,000 (single) / $218,000 (joint)

• At the top bracket (≥ $500k single / ≥ $750k joint):

  • Part B premium increases to $689.90/month

  • Part D IRMAA adds up to $91/month

Because IRMAA uses a two-year income lookback, 2026 premiums are based on your 2024 tax return.

For clients who are close to an IRMAA threshold, strategic planning around withdrawals, Roth conversions, or one-time income events can meaningfully reduce unnecessary costs.

2. Major Shifts in Medicare Advantage: Fewer Plans, Narrower Networks

Medicare Advantage (MA) is entering a period of contraction. After years of growth, insurers are now recalibrating due to higher medical costs and regulatory changes.

Here’s what to expect:

• Many companies are reducing PPO offerings and expanding HMO plans, which typically have more restricted provider networks.

• A growing number of hospitals and physicians are leaving MA networks, meaning some retirees may lose access to preferred doctors or facilities. 

For clients who value provider flexibility or travel frequently, this may be the year to evaluate whether Medicare Advantage continues to fit your needs, or whether Traditional Medicare paired with a Medigap policy offers better long-term stability.

3.   Higher Out-of-Pocket Costs Across Many Plans

To manage rising expenses, insurers are raising various forms of cost sharing:

• Higher maximum out-of-pocket caps

• Higher hospital copays, including some increases of more than 30% for the first several inpatient days

• New or reinstated monthly premiums on plans that previously had none

We think it’s important to review the Annual Notice of Change for your current plan, to see how any potential increases might annual cash-flow planning and overall cost predictability.

4.   Prescription Drug Changes: Fewer Plans and Higher Costs

 Prescription drug coverage is undergoing another significant shift.

• The number of stand-alone Part D plans will fall to 360 in 2026, down from 464 in 2025 and over 700 just two years ago.

• Deductibles are increasing for many plans.

• Some drugs that previously carried flat copays will now require coinsurance, meaning you pay a percentage of the drug’s cost.

• Formularies (each plan’s list of covered medications) are narrowing.

Because these changes are plan-specific, retirees should run their medications through the official Medicare.gov tool during enrollment to avoid surprises. The difference between plans can result in additional costs, depending on the medication. 

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Conclusion 

The Medicare landscape is becoming more complex, and this year brings more changes than usual. In our view, the most important considerations include:

• Understanding whether you're likely to cross an IRMAA threshold

• Confirming that your 2026 plan still covers your preferred doctors and hospitals

• Reviewing prescription coverage carefully, especially if you take ongoing medications

• Evaluating the trade-offs between Medicare Advantage and Traditional Medicare

• Incorporating rising premiums and out-of-pocket costs into cash flow plans for 2026

As always, we are here to help you evaluate your options in the context of your full financial plan. If you’re unsure how these changes may affect you, or if you anticipate healthcare usage or income changes this year, let us know.

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Sources:

“2026 Medicare Parts A & B Premiums and Deductibles,” Centers for Medicare and Medicaid Services, November 14, 2025.

“Big Changes are Coming for 2026 Medicare Plans. What You Need to Know,”
The Wall Street Journal, October 15, 2025.

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